Short sales are becoming more common these days, whether we like it or not. A short sale occurs when the sale of a property will not generate enough proceeds to cover what the seller owes their mortgage lender(s).
Offers on short sale properties must be approved by the seller’s lender before they can be officially accepted. And when a short sale property is listed in the Multiple Listing Service, the agent must call out language that it is indeed a short sale and it requires lender approval. Lender approval often takes months to receive, as the bank must do their own appraisal, a littany of paperwork, and often times negotiate with secondary lien holders in order to approve the sale.
Right now, there is no way for me to quickly find short sale properties, as the CT Multiple Listing Service does not have a required field which denotes a property is a short sale. Luckily, they will be adding this searchable field at the end of August and it will make my job a lot easier. Here’s why…
This morning one of my investor buyer’s called me to find out about short sales in Hartford. Because there is no searchable field, I had to look through all of the properties manually, both single family homes and multi family homes.
As of today, out of the 335 multi family homes for sale in Hartford, 51 of them are short sale or bank owned properties. That’s 15% of the market! The same is true with single family homes available for sale, out of the 153 single family homes, 23 are designated as a short sale or bank owned. Again, 15% of the market.
This is good news for my investor. They have time on their side and lots to choose from. The searchable short sale field will also make it easier for me to monitor area towns to see how the percentage of short sales compare, and when they increase or decrease. Will we actually work through the short sale inventory, or will it continue to sit and move towards foreclosure, eventually becoming bank owned?
Amy,
Interesting article. 15% of the market as shortsells does not bode well for local property owners. Is this percentage for the City of Hartford or the Greater Hartford Area? Also, is it possible for the “lay” person to access the short sale and foreclosure databases where this information is stored? Thanks! —-Furniture Fan
15% is for the city of Hartford only. And yes, short sales do hurt property values because they often sell below appraisal values. Those closed short sales will then be used as comps for appraisals on standard sales. Not good.
Short sales and bank owned properties are listed in the Multiple Listing Service and then are loaded into Realtor.com, Raveis.com, etc., so the “lay” person can indeed see them and have access to them. Foreclosures are slightly different, as they are handled by the legal system. You can check your local paper for foreclosure sales, court documents, or a website like RealtyTrac.com to see foreclosure information.